Ordinary day for Asian stocks

Uncertainty continues despite strong gains for US markets

The Asian stocks ended mixed despite upbeat cues from the overnight US markets as intense volaltily in the currency markets kept the movement under check. The US Federal Reserve reported yesterday that industrial production rose 1.0% in July after having edged down 0.1% in June while factory output soared 1.1%—its biggest jump in nearly a year. This pushed up the DOW by nearly 1%, ensuring that the bulls are back into play for the risky assets. However, sell off in Chinese stocks and a massive correction in the share prices of the mining major BHP Billiton in Australia kept the gains under check, making it a fairly ordinary day for the region wide stocks.



The Japanese stocks trimmed recent array of losses, taking cues from Wall Street where the major averages ended in positive territory with modest gains on better-than-expected earnings from Walmart and Home Depot. The market was seen extending yesterday's intraday gains and the benchmark Nikkei 225 Index added 78.86 points, or 0.86% to close at 9,241. The broader Topix index of all First Section issues was up 8.45 points, or 1.02%, at 835.

On the economic front, Cabinet Office in Japan stated that the country's leading index for June was revised up to 99 from 98.9 reported in the preliminary report, marking the first increase in leading index after falling for two consecutive months. For May, the leading index stood at 98.6. The report further noted that the coincident index rose slightly to 101.3 in June from 101.2 in May.

The Australian market was in no mood to add to the gains made yesterday though as losses in the global mining major BHP Billiton, which announced plans to acquire Potash Corp of Saskatchewan for a consideration of A$42.59 billion, hurt the overall momentum. The benchmark S&P/ASX200 Index dropped 2.10 points, or 0.05%, and closed at 4,475 points, while the All-Ordinaries Index ended at 4,504, representing a modest gain of 0.70 points, or 0.02%.

On the economic front, a report released by Westpac Bank in association with Melbourne Institute revealed that a leading indicator of the Australian economy continued to surge ahead in June despite a moderation in the pace of growth. As per the report, the country's leading index rose 6% on an annualized basis in June, well above the long term trend of 3%, compared to an annualized growth rate of 7.4% in the previous month. On a monthly basis, the leading index was unchanged in June compared to an upwardly revised 0.3% rise in May.

Chinese stocks ended in red as profit selling emerged after steep gains off late. The markets had rallied by more than 2% yesterday with the index linked counters surging, led by Agricultural Bank of China. Banking and property developers slipped and the benchmark Shanghai Composite Index slid lower by 5.59 points or 0.21% to 2666.30 2, giving up the earlier gains.

In Mumbai, the key benchmark indices surged to hit fresh intraday high in late trade, with data showing sustained buying by foreign funds boosting sentiment. IT and metal stocks surged. Auto, FMCG and metal stocks also gained. As per provisional figures, the BSE 30-share Sensex was up 233.35 points or 1.29% to 18,282.20. The index rose 237.15 points at the day's high of 18,286 at the fag end of the trading session. The S&P CNX Nifty was up 72.20 points or 1.33% to 5,486.35 as per provisional figures.

In other markets, the Hang Seng index in Hong Kong dropped 0.54%, TSEC in Taiwan also dropped 0.0.9% while Strait Times index in Singapore slid 0.14%.

Currency markets were quite volatile today. Dollar fell to 1.2900 against the Euro before recovering slightly. DOW futures were mixed, staying in and out of the positive territory. The commodity prices drifted lower with Gold dropping near $1225 per ounce for the benchmark COMEX December futures while crude oil shed one full dollar to topple as low as $74.69 per barrel.